# A,B,C D are partners sharing profit in the ratio 2:4:3:1. c retires and for this purpose goodwill is valued at two year purchase of average super profits of last four years ,which were as under 1 year 400002 year 10000(loss)3 year 1000004 year 150000the normal profit of the similar firm is rs56000.pass necessary journal entry for goodwill on retirement of c.

Dear Student,
First, Calculate average profit =$\frac{40,000-10,000+1,00,000+1,50,000}{4}=\frac{2,80,000}{4}=70,000$
Secondly, difference of average profit and normal profit is Super Profit.
Super Profit = Average Profit - Normal Profit = 70,000 - 56,000=14,000
Goodwill is valued at 2 years purchase of super profits
Therefore, Goodwill = 14,000$×$2= 28,000